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The dance around the GAFA god

By Thomas Bjørnstad, PA financial services expert

The traditional ways of adopting best business practice, such as lean, benchmarking and learning from other organisations in the same industry is no longer enough.

Google, Apple, Facebook and Amazon (GAFA) have changed competition dynamics and the rules of the game. But instead of copying GAFA, digital transformation is about finding your own path based on an honest assessment of your own capabilities, but not least creative and critical thinking form the boardroom and all the way through the organization.

The digital prophets have managed to scare top management and boardrooms, and "everyone" is now desperately looking for digital heads. The irony is that the boardrooms in particular lack fundamental technology skills. Another irony is that individuals represented on boards and group management tend to have a lot of self-confidence in their decision-making. The combination can potentially create a Molotov cocktail of unhealthy decisions, chaos and lack of action.

According to the classic definition, competition parity has happened. Toyota inspired many with its "lean manufacturing", while General Electrics has inspired many with its models of strategy and management. However, the significance of these examples fades in light of GAFA.

Facebook has managed both to create addition and to define reality through just being "the social network". Apple is another example that has created a faithful church through user experiences and it's own eco-system. While Google's advanced algorithms determine what information you get and control the most important portal to the world.

Every visionary business leader drams of disrupting his market, but GAFA has characteristics that go far beyond a business. GAFA is like a nation and a window to the world, and top executives should therefore be more concerned about ensuring a successful digital transformation for their business.

The dance around GAFA God

Many traditional businesses have created a digital surface with online solutions and applications. The digital words have appeared in strategies, role descriptions and in the project portfolio, but has the business transformed for that reason?

A successful digital transformation begins with the recognition that the business must find its own path based on an honest self-image, and some clear theses of key beliefs for the business. It all starts with critical and creative thinking. The totality and relevance of the business must be understood. The skills shortage must be offset, and it requires time, focus and new skills.

HR must also be the business and not a support function. New digital heads do not help development if they do not work closely with the entire business. It is challenging to create

“Every visionary business leader dreams of disrupting his market, but GAFA has characteristics that go far beyond a business.”

interdisciplinary teams working together with mutual respect and high efficiency for the collective best interests.

There are a lot of party talks and digital words these days. Top management must of course set direction, but change requires that the elephant is divided into pieces. Area by area must be fixed with dedicated teams. Top executives must understand the business in terms of platform and modular thinking. Some things can be solved separately, while other things must be built and open to others.

You should be taking away the prophecies about GAFA dominance, and instead be directly concerned with how the leading players in the industry seize the change from inside. Look at how to build structural capital and expertise to find new revenue sources, create profitable new business models and how to change the kernel bit by bit.

Over the last 24 months, PA has been working on projects and observed how from PSD2 to Open Banking the focus has been on "beyond banking", "platform as a business" and "disrupting the core". The interesting thing here is not whether anyone is predicting a day of judgment and a paradigm shift "overnight" but rather how developments take place through a series of changes to the margin that will eventually create significant change needs.

If you manage to adjust your actions to the terms of the day, you will win. However, if you stick to your own actions or dreams, and do not take account of what is happening elsewhere, you will get it wrong.

Find out more about our work in financial services.

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